Dominguez views gov’t property sales as ‘unlikely,’ warns against ‘fire sales’

FINANCE Secretary Carlos G. Dominguez III said the government does not need to sell property to cover the funding requirements for containing coronavirus disease 2019 (COVID-19), and called such sales unlikely.

Mr. Dominguez said Thursday night that the Philippines has sufficient financial resources, including borrowing capacity, to deal with the pandemic.

“The President has really done a very good job economically, we kept on growing and we are in a good position,” Mr. Dominguez told People’s Television Network (PTV-4).

“Of course the President (might have mentioned the) worst possible scenario that, maybe at some point, we may have to sell some assets but at this point, that’s not yet necessary and frankly I don’t think that will be necessary (to resort to a) fire sale. I dont believe that will ever happen,” he said.

Proposals have been put forward to sell military land as well as the Cultural Center of the Philippines and the Philippine International Convention Center (PICC), after President Rodrigo R. Duterte floated the idea of asset sales last week.

Mr. Duterte was discussing the limits to government resources if the pandemic is prolonged, adding that it could resort to property sales if state funds are depleted. He brought up asset sales again in his televised address on Thursday night.

Mr. Dominguez said when the pandemic hit the Philippines, its financial standing was solid due to increased revenue, prudent fiscal management, and a strong credit rating.

“(When) COVID emergency (started), we were in a very good financial position because of policies of President Duterte. One, we increased our revenues, he spent money very wisely and because of that, tumaas yung credit rating natin at yung (our credit rating increased as well as our) reputation natin as a good borrower is very high, the highest ever achieved by the Filipino people, we are now BBB+, and next step (is a rating of) A… so the President has really done a very good job economically,” he said.

Senators have expressed support for asset sales to add to the war chest for the COVID-19 response.

Senate Franklin M. Drilon has urged the economic team to undertake a “speedy” review of state assets that can be sold immediately. Mr. Drilon said the additional funds will also help mitigate the rising budget deficit, which is expected to hit 5.3% of GDP from 3.5% in 2019 and the pre-pandemic target ceiling of 3.2%.

“Better utilization of these state assets is long overdue as a national policy. The government does not have to look far to raise additional revenues. There are ‘low-hanging fruits’ the government can immediately tap to provide the much-needed resources for our country to survive this pandemic,” he said.

Senator Panfilo M. Lacson concurred, saying that the government can sell military property provided that these sales do not compromise the security of military bases.

The government is looking to fund its programs and emergency response to COVID-19 from revenue, realigned budgets, tapping departments’ savings, state firm dividends, collecting savings of government agencies from cancelled events, among others.

To help plug any funding gaps, the Department of Finance (DoF) is looking to tap multilateral lenders for at least $5.6 billion worth of financing, with $3.858 billion in proposed funding from the Asian Development Bank and $1.8 billion from the World Bank.

It is also looking to tap the Asian Infrastructure Investment Bank (AIIB) and commercial markets for additional funding. — Beatrice M. Laforga